Country: Sub-Saharan Africa

On international women’s day, women save to succeed

Posted on by TIMOTHYRADIER

This month, we celebrate International Women’s Day united in the 2018 theme “Press for Progress.” While much of the discussion is around how global actors are pressing for progress on women’s equality at the macro level, I’d like to take a deeper look at how a low-income woman presses for progress in her own financial life.

Our program, Financial Sector Deepening Africa (FSD Africa), funded by UK aid from the UK government, is supporting Women’s World Banking’s partnership with Diamond Bank in Nigeria to improve access and usage of savings accounts among low-income clients, particularly women.

Three years into this partnership, we’re starting to understand just how transformational saving with a formal institution can be for women.

Women’s World Banking’s global research shows that women have specific and often complex savings needs. They are juggling scarce resources to cover day-to-day expenses with an eye toward the future. They save against emergencies and toward goals such as education and business growth.

However, low-income women often face barriers to accessing a safe place to save due to mobility and time constraints as well as low levels of financial literacy. They are forced to save in less reliable ways: at home in a drawer or under a mattress, by buying excess stock for their businesses or through a neighborhood savings club.

In Nigeria, Women’s World Banking’s research revealed a strong savings culture. Women running businesses in the bustling urban markets of Lagos put aside as much as 60 percent of their daily income in informal savings tools such as ajo, adako and other methods. What was most surprising though—these women’s businesses were located literally steps from bank branches. Why were they not opening savings accounts?

The answer—the distance is emotional, not physical. These market women are familiar with banks yet they do not see them as relevant or accessible. Even those who have accounts usually place most of their money in traditional, though more informal, financial tools. Diamond Bank set out to close this gap by offering an innovative and relevant savings product that crosses the barriers preventing low-income Nigerians from accessing formal financial services.

Planting a Seed: A transformational savings account

The BETA (meaning “good” in pidgin English) account targets self-employed market women and men who want to save frequently (daily or weekly). The account can be opened in less than five minutes and has no minimum balance and few fees.

Because these clients, especially women, value convenience, the product is built around serving women in the market where they work. Agents, known as BETA Friends, visit a client’s business to open accounts and handle transactions, including deposit and withdrawal, using a mobile phone application.

With support from FSD Africa, Women’s World Banking and Diamond Bank are expanding on the BETA proposition to offer women more financial tools and services, including BETA Target Savers, a long-term savings account to help clients work toward larger goals.

Today, Diamond Bank has more than 520,000 new savings account holders who are using these valuable tools, more than 197,000 of whom are women. That’s more than a half million low-income clients who did not previously have access to Diamond Bank, a bank often just steps away from their businesses.

One woman client, who has BETA Friend agents visiting her market stall regularly to collect deposits, put it quite simply:

I want them to be coming around often so that I can save my money, so I can use it to do better things for myself.

With Target Savings, we’re hearing a similar sentiment. A woman client said,

You keep your money to achieve what you want to do. You keep in the back of your mind to achieve your goal.

When we look at how women are able to “press for progress” in their own lives, we know that true financial inclusion is not just about opening accounts, but meaningful usage of these accounts to achieve financial goals and build a better future. Women’s World Banking’s partnership with Diamond Bank is at an exciting phase of the project where we can start to understand just how transformational these savings accounts will be.

While we’re in the very early stages of analyzing the data, Women’s World Banking is looking at exactly how clients are doing this. After conducting a baseline survey in 2015 as well as a follow up survey in late 2017 to measure how clients are using the savings accounts to improve their lives, we are seeing promising early results, specifically in using savings to grow businesses and achieve goals.

Clients are reporting using their savings to fund business expansion. This is a critical point as financial services for low-income women are often associated with micro loans, and while credit is an important tool, savings is essential for women to grow their businesses.

Additionally, time and time again, when Women’s World Banking asks women about their primary savings goals, education for their children is at the top of the list. Initial survey results are showing that BETA clients are saving for their children’s education and are more likely to have all of their school-aged children in school.

On International Women’s Day, we’re happy to celebrate these promising signs of progress for women in Nigeria. We look forward to continuing to learn more about how savings tools can help women to press for progress.

This blog was published by Women’s World Banking http://www.womensworldbanking.org/news/blog/international-womens-day-women-save-succeed/

Women in financial inclusion policy advancement

Posted on by Kihingu Inc
Join us in celebrating International Women’s Day 2018!

Through our #PressforProgress campaign, we are proud to share information about our partnerships that are supporting women’s economic empowerment in a variety of ways.

 

 

The Fletcher School Leadership Programme for Financial Inclusion is an intensive and innovative executive education initiative for promising financial regulators and policymakers from emerging and frontier markets, including in sub-Saharan Africa. Through support from FSD Africa, the Bill & Melinda Gates Foundation and the MasterCard Foundation, the programme has trained financial regulators and policy makers, including 40% women, with many going on to develop and implement policies that address financial inclusion in their respective countries, including for women.,

Addressing the gender gap in fintech

Posted on by Kihingu Inc

Just as in technology and finance industries around the world, fintech companies in Africa are grappling with a severe under-representation of women in leadership roles and throughout their businesses. When compiling the data in the 2017 Fintech Talent Africa report, Digital Frontiers Institute (DFI) made gender balance a particular focus of the research, knowing that this is a significant problem in the industry.

The findings of the report validated this belief. More than 400 industry leaders and professionals responded to the survey and of these, only 12.5% were women. The gender gap was reflected again in the data they reported: respondents indicated that the teams they lead are made up of approximately 39% women, while senior or executive teams are made up of 43% women. This data highlights that there is still a way to go in order to achieve gender parity.

To learn more about addressing the gender gap in fintech, access the full blog via this link.,

Remittances as a source of income for women

Posted on by Kihingu Inc
Join us in celebrating International Women’s Day 2018!

Through our #PressforProgress campaign, we are proud to share information about our partnerships that are supporting women’s economic empowerment in a variety of ways.

Cenfri supports financial inclusion and financial-sector development through facilitating better regulation and market provision of financial services through research, advisory services and capacity-building programmes. FSD Africa and Cenfri have partnered on the Risk, Remittances and Integrity (RRI) programme which seeks to strengthen the integrity and risk management role of the financial sector and to facilitate remittance flows within and into the continent.

With respect to remittances, research conducted by Cenfri indicates that remittances are an important source of income for women in sub-Saharan Africa. They are used to meet monthly expenses, deal with unexpected shocks, and support family obligations (e.g. paying school fees).,

Women and digital financial services

Posted on by Kihingu Inc

 

Join us in celebrating International Women’s Day 2018!

Through our #PressforProgress campaign, we are proud to share information about our partnerships that are supporting women’s economic empowerment in a variety of ways.

 

 

 

The Digital Frontiers Institute is a one-of-a-kind institution that is building human capacity in digital financial services by equipping a new generation of fintech professionals with the information, skills and vision they need to deliver and guide society towards inclusive digital financial solutions. DFI recognises the under-representation of women in leadership roles in digital financial services and fintech as well as the general lack of financial inclusion for women across the world, particularly in sub-Saharan Africa. Through support from FSD Africa and other partners, DFI is addressing these issues by equipping women with the necessary qualifications and training to develop digital financial services and products that sustainably include them and that, in turn, allow women actively participate in the economy.,

Unmasking executive education in sub-Saharan Africa

Posted on by TIMOTHYRADIER

Cathy pauses by the window of her fifth-floor office to look at the rain clouds gathering and the traffic beginning to build.  It is four o’clock in the afternoon and her boss has just walked in to ask for a ‘short’ team meeting. She is anxious; an important customer has just called to query some figures in his bank statement and wants it addressed by the end of the day.

A mother of two, Cathy has recently enrolled for an executive MBA programme at a local university. Her classes start at 5:30 p.m. and she knows only too well that she has to leave the office by 4:45 to beat the traffic. A few months earlier, during her performance review, her boss told her that she needed to improve her qualifications to advance further into management. But a colleague of hers, who got a promotion after completing an MBA, recently had a bad review. She wonders if taking the executive programme will be worth all the effort.

Will Cathy’s investment in executive education improve her career prospects? Will it lead to rease? And will her newly acquired skills improve her day-to-day job performance? In 2016, FSD Africa commissioned research to assess the impact of executive education in financial services firms and to help answer these questions.

On the subject of pay, it found that many employees with ExEd qualifications do not feel their salary is commensurate with their education, especially as many have had to pay fees to advance their studies. ExEd graduates do report, though, that they are more mobile in terms of career prospects than their peers. Importantly, managers respect the work of employees with ExEd qualifications, reporting that they perform well and are innovative – particularly in terms of applying the skills they acquired to problem solving.

Qualitative data from the report indicates that ExEd employees in financial services firms improve the image of their organisation and play a key role in shaping customer perceptions of it. What’s more, both employee and manager groups reported that ExEd is particularly effective in improving customer service skills – and therefore increasing customer satisfaction.

The research recommendss in the delivery, scope and content of executive education, in order to address the needs of the financial sector. The most important of these is that ExEd should be more practical in nature, instead of focusing so heavily on theory. In addition, longitudinal research is necessary to measure the impact of executive education programmes on students and organisations. And lastly, improvement is needed in performance measurement within financial services firms, in order to better demonstrate the link between ExEd and performance, pay and mobility.

Click here to download the full report: ‘The Impact of Executive Education in sub-Saharan Africa’.

 

Written by Dr. Moses Ochieng, Consultant-Professional Skills Development, FSD Africa<

What banks can do to tame the tide of bad debts

Posted on by Kihingu Inc

Alex is a mid-manager at an NGO in Nairobi.  He’s servicing a home loan for a two-bedroom apartment in an upmarket neighborhood, and two car loans – one for him and one for his wife. His four-year-old son is in a private nursery school and Alex is considering enrolling him in a private elementary school next year.

Two years ago, he took another loan to buy the land where he intends to build his family home. The land is 50 kilometres from the main road and the access road is yet to be paved. None of the owners of other plots near his have considered developing their properties but there are plans to connect electricity and water.

The family goes on holiday twice a year – again, financed through personal loans. Alex is also financially responsible for taking care of his elderly mother, who has no income and lives in the village. On top of that, he pays for his younger sister’s college education; she’ll be finalising her diploma course in the next two years. He also employs his cousin, who recently of college, in a small business Alex started to supplement his income.

Since he has a pay slip and a contract of employment, the bank considers Alex to be a good customer and often tops up his home loan whenever he faces financial pressure. In addition, Alex is a member of a SACCO. He has a loan there, as well as two peer groups – one is a welfare group and the other is an investment club.

With all this to consider about Alex’s background, how can the bank properly assess the risk of lending to him? Risk management practices vary from bank to bank depending on their policies on granting credit. Poor credit risk management can lead to institutional failure. This, in turn, can reduce financial inclusion.

In 2016, FSD Africa commissioned a market study to assess demand for, and supply of, risk management training for the financial sector. The study looked at three markets: DRC, Ghana and Kenya.

It found that in most institutions, after a brief orientation or introductory course, new staff members are puto operations without appropriate skills training. In a majority of institutions surveyed, no risk management training is provided to entry-level staff (those in their first or second year at the institution).

Not surprisingly, most institutions cited poor portfolio performance as a symptom of poorly trained staff.  But the importance of entry-level training is still underestimated. Entry-level staff are the foundation of any financial sector. Without strong skills at the foot of the staff pyramid, middle managers struggle to control risk in daily operations. And in addition to strengthening risk management, better entry-level staff training can lead to an improvement in the quality of customer service.

How, then, can such training be improved? Above all, the study recommends the development of a comprehensive risk management training programme. This would address risk management training needs, particularly for entry-level staff, and help them to stem the rising tide of bad loans.

Notes from the frontier: FSD Africa’s fragile states approach – a learning journey

Posted on by Kihingu Inc
Part Two: How do you get a banker interested in refugees?

Between 1-3 November 2017, FSD Africa brought two worlds together for the first time. Working with UNHCR, Government of Rwanda, and Access to Finance Rwanda (AFR), we took decision-makers from the banking community into Gihembe Refugee Campin Rwanda to participate in a ‘Financial Product Design Sprint.’

Refugees and other displaced populations are not an obvious place for FSD Africa to be working. We are a financial sector development programme, focused on developing markets and commercially viable financial systems over the medium to long term. Refugees, in much of the popular narrative, are transient, risky and poor – not a client group that a bank would typically target. So how do you foster private sector interest in refugees as customers?

The role of markets in humanitarian crises is not a new subject. Amartya Sen wrote Development as Freedom (1999) almost twenty years ago, making the argument that famines and other crises are caused by a complex web of economic, political and social forces, not just a disruption to food supply. If we focus on one cause of a humanitarian crisis, we’ll miss the underlying challenges that allowed it to happen.  The failure of markets is often a critical factor in creating a crisis, and the development of functioning markets are vital for any long-term solution. We think that financial markets play a key role in a long-term, sustainable response effort, by easing transactions, supporting safety nets, helping to manage risk and channeling credit to those who can use it productively.

Sen was writing about famines in the late 1990s, when the total number of people of concern (refugees, IDPs and other forcibly displaced people) in the world had plateaued at around 20 million. Today, this number is 67 million, and rising. There are more forcibly displaced people in Sub-Saharan Africa than there were worldwide in 1999, and almost half of these (9.8 million people) live in countries where the FSD Network has a presence. So if we are on the ground, and accept that markets (including financial markets) have a role to play, we have a strong imperative to respond.

But how? Bankers are profit-driven and risk-taking is generally disincentivised by regulatory frameworks. How can we, as the development sector, help them to build a viable business case for serving refugees?

We’re new to this. So, a test-and-learn approach makes sense. But, so far, some important themes have emerged that are guiding our work:

  1. Help to build the business case: Much of the data and information behind the successful business models can be a public good, which is a good use of development spend. Banks might not want to cover the costs of gathering market intelligence, but if – the role of the institution is to use this information smartly (and better than its competitors). Watch this space for market intelligence gathered by <"http://bfaglobal.com/">BFA and FSDA.
  2. Be honest about what can (and can’t) be done: Some forcibly displaced people cannot be feasibly reached in a commercially viable way. For example, very new migrants, or very poor in remote areas with minimal economic activity, pose difficult challenges. Some of the responsibility will inevitably still fall on humanitarian agencies, especially in the short term. The key is to develop a credible path to more sustainable models to improve the lives of FDPs over the longer-term.
  3. Look for partnerships that fill gaps in capacity and outreach: There aren’t many people out there with expertise in both financial market development and humanitarian crises. So, partnerships are critical. We are working closely with UNHCR, AFR and other agencies that know and understand refugees better than we do. Similarly, a bank might not serve refugees directly but it might work with an NGO and a mobile money provider to build an integrated solution.Bring the refugee voice into the conversation: Refugees and other displaced people have very different stories, and are not a homogenous group. They use money differently and have various needs from financial services. Some of these are counterintuitive and hard to predict. For every event we have held with financial service providers, we have invited refugees themselves, and, as a next step, we are taking bankers into a refugee community to participate in a product design sprint. This is, we think, the best way to break down information barriers and build empathy.
  4. Incentives matter: Information and exposure are useful tools, but sometimes financial support is needed to change behaviors. So, we are looking for ways to use financial subsidy to unlock innovation in the financial sector. We do this by identifying where the blockages are, and understanding how development money can be used to incentivize a decision (developing a new product, building a nhannel) that could genuinely impact the lives of refugees. FSDA will launch a Product Design Competition in December 2017. Round One will provide up to x4 awards of £10,000, while Round Two will provide up to x3 awards of up to £150,000.

The current crises of displaced populations such as those in Rwanda, Uganda, Nigeria and DR Congo are going to be long and complex, and solutions need to take into account this complexity. Financial markets can play a small but critical role in the overall picture, and for that to happen, we need to get bankers interested in refugees – as incongruous as those two worlds ma

FSD Africa completes its investment in African local currency bond fund

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FSD Africa (“FSDA”) announces the completion of its £15.3 million ($20.3 million) investment in the African Local Currency Bond Fund (“ALCBF”).

Since FSDA announced its intention to invest in the fund in May this year, ALCBF has continued making good progress.

It has invested a total of approximately $10 million in four more bonds – including in Nigeria and Lesotho, extending its geographic reach and its financial support for developmentally important sectors, such as agriculture and housing.  ALCBF entered Côte d’Ivoire with a $ 3.1 million bond investment in Alios, a regional leasing company. The bond proceeds will benefit the company’s operations in Burkina Faso and Mali, demonstrating that there are opportunities for bond financing even in fragile and conflict affected markets.

ALCBF has also received funding commitments from lenders totalling $40 million – including the International Finance Corporation ($20 million), Calvert Foundation ($10 million) and the Dutch development bank,
This additional funding has enabled the fund to establish a permanent presence in West Africa, where it has now opened an office in Lagos, Nigeria.

As such, with invested capital of $40 million and a total fund size of over $100 million, ALCBF is strongly positioned to fulfil its objective of developing capital markets across Africa, by helping companies issue bonds in local currencies and by building technical capacity in the markets where those bonds are being issued.

As an equity investor in the fund, FSDA will join the Board of ALCBF.  Completion is subject to satisfaction of certain conditions precedent, expected shortly